Headline for .     Since the beginning of 2018, despite the Covid-19 pandemic, currencies around the world are generally down against the United States dollar.     
World Currency Observer
World Currency Observer

Exchange Rates: one year high and low

November 2, 2023 (see November 20 update below). Next update: December 4, 2023. Visit Search to look at past issues of World Currency Observer (brochure edition).

October 2023 saw the largest economies of the world (such as the United States and the European Union) hold off on further interest rate increases, and some interest rate decreases in other countries. With regard to exchange rates, the Canada dollar fell by 2.5% against the US$ in October 2023, and the Mexico peso was down by more than 3.5% (up 9% since this time last year). The Haiti gourde and the Costa Rica colón both showed a slight net increase in value against the US$ in October 2023 (the colón is up 14% since this time last year). The Uruguay peso fell by 4% against the US$ in October 2023 (up around 2% since this time last year), and the Paraguay guarani was down by nearly 2.5%. The Colombia peso was up by around 1.4% in October (the Colombia peso is up by 16% since this time last year). The Euro finished October 2023 with almost no net movement against the US$. The Norway krone was down by 5% against the US$ in October, and the Sweden krona was down by 2.4%. After falling by 7.5% against the US$ in September, the Poland zloty rose by 4.3% in October 2023, and is up by more than 7% against the US$ since this time last year (see World Currency Observer October 2023 update). The Turkey lira showed a net decline of 3% In October - in the last days of October, the Turkey central bank raised its key policy interest rate by 5%, to 35% (still well below the current inflation rate). The Ukraine hryvnia bounced up sharply from its previous level early in October, before falling back later in the month in the wake of changes in its key policy interest rates (see below). The Russia rouble was up by 4% in October 2023 against the US$. The Israel shekel was down by 5% against the U$ in October 2023 (under market pressure connected with the Gaza war, which began on October 7, about the time the shekel began its sharp October decline), and, as a result, the shekel is down by nearly 9% since this time last year. The Ghana cedi is down by more than 2.75% In October 2023, and is up by 15% against the US$ since this time last year. The Zambia kwacha was down by 5% against the US$ in October 2023 (after a 4% fall in September), and is down 30% since this time last year. The Malawi kwacha and the Seychelles rupee were down by around 5% against the US$ in October 2023. The Indonesia rupiah was down by nearly 2.5% against the US$ in October 2023, and the New Zealand dollar was down by nearly 3.5% (the New Zealand dollar has shown no net change against the US$ since this time last year). The Australia dollar was down by nearly 2% against the US$ in October. South Asia currencies showing strength against the US$ in October 2023 (up around 2.5%) were the Pakistan rupee, and also the Afghan afghani (see World Currency Observer October 2023). The Laos kip was down nearly 2.5% in October against the US$ (down 17% since this time last year), and the Sri Lanka rupee was down by 1% (up 11% since this time last year). World oil prices eased in October 2023 and are now down nearly 9% from this time last year. Gold prices are up more than 20% since this time last year.

Some background news from Ukraine, which is managing its exchange rate at a time of total war with Russia, with enormous physical and human destruction, but also asserts that it is having a good year for agriculture production. The key Ukraine policy interest rate was lowered by 4% to 16% near the end of October (said to match changes in market overnight interest rates), but the spread on rates for other key interest rates paid by Ukraine banks in the their transactions with the Ukraine central bank (3 month loans and short-term securities repurchase agreements) were raised, leaving them unchanged (at, respectively, 20% and 22%, at a time when inflation in Ukraine is running at roughly 8% year-over-year.) The central bank governor noted that the budget deficit is at nearly 29% of GDP (not unreasonable for a country at war-there is also a large current account deficit), but that much of this being offset by widespread support (from the United States, European Union and many other countries) for the war – the figure mentioned was US$45 billion in 2023. One result is that the hryvnia has remained at around 37/1$US, a level at which it has been for many months (the hryvnia did, however, go up sharply in the early weeks of October before falling back, as noted above). One issue: will the situation in Israel/Gaza result in less such financial aid to Ukraine (not to mention any changes in Ukraine financial support due to pause in legislative activity in the United States House of Representatives.)

November 20, 2023 update

Albania, the Balkan (European) and formerly communist country which has its own non-Euro currency (the lek, first introduced in 1926 and named after that well-known-from-history Macedonian Alexander the Great) and also has what are widely considered to be among the best swimming beaches in Europe (a major source of tourism), is going through what Albania commentators generally consider to be a “currency crisis” – the Albania lek, last month, and over the last year, has been the strongest performing currency in Europe against the Euro and, as the Euro has risen against the US dollar, the lek is up by nearly 17% against the dollar since this time last year (except for some “weakness” in January and August 2023, the lek has risen steadily since this time last year). The local view of an Albania currency crisis is based on, among other things, declining exports linked to the strong currency. Another factor is that there are strong indications that, based on positive drilling results which were first announced in July 2019 (leading to an August 2023 announcement of a potential for a major drilling investment), Albania's onshore Shpirag oil field could turn the Albania lek into a petro-currency – once a final assessment of commercial viability (expected by the end of 2023) is completed, Albania will be in better position to make other assessments, such as the appropriate level of interest rates for a country with inflation that is, roughly, in the four percent range.

A group of currency exchange rate benchmarks for WCO are the inflation-adjusted changes in US dollar commodity prices, from the level that they were at before the Covid-19 pandemic nearly four years ago - since that time, the US price level has moved up, depending upon the definition used, by as much as 20%. Using this 20% inflation adjustment factor, world oil prices have, compared to what they were before the pandemic four years ago, not moved up at all (although there have been ups-and-downs), wheat prices are down by 20%, and rice prices are down by 5%, after inflaton-adjustment, over the last four years. Cocoa and sugar prices, after the 20% adjustment for United States inflation, have among the strongest upward movers in tropical commodities since before the Covid-19 pandemic, and have been up very strongly over the last year - the strong upward movement in cocoa prices has been widely noted, and is usually attributed to the effect of drought conditions in Ghana and Cote d'Ivoire. A third tropical commodity, coconut oil, has also had a strong movement since before the pandemic, after the 20% inflation adjustment. There is a long list of commodities whose inflation-adjusted prices have risen by roughly 10% since before the start of the Covid-19 pandemic (working out to an upward movement of roughly 2.5% per year on average) - this list includes: gold, silver and copper among metals; and, among agricultural commodities, coffee. Among commodities whose prices have shown a roughly zero upward movement after inflation-adjustment are aluminum and maize, Then, there is the longest list, that of commodities whose inflation adjusted prices have fallen, which includes cotton, coal, rubber and, as noted above, wheat and oil prices.

(World Currency Observer will next be updated on December 4, 2023. Visit Search to look at past issues of World Currency Observer (brochure edition). For permission-to-quote enquiries, e-mail World Currency Observer at WCO@briargreen.com.)